Projects

Project Information

Participatory Development of Agricultural Technology Project

Country and Location

Republic of Indonesia

Borrower

Republic of Indonesia

Date of Approval

1 July 1997

Objectives and Scope

The overall objective of the project is to improve farm incomes and welfare and alleviate poverty in rural areas through the increased generation, transfer, and adoption of user-oriented agricultural technologies and management practices to support agribusiness development. The project aims to achieve the overall goal through the following project-specific objectives: (i) strengthen the capacity of Agency for Agricultural Research and Development (AARD) to manage and implement regional participatory agricultural research and development programs in support of national and regional priorities for sustainable agricultural growth and output diversification; (ii) improve the national agricultural research system's capacity to generate strategic technologies in support of the regional research and development programs; and (iii) accelerate the transfer and adoption of location-specific, user-oriented technologies in agriculture and

Total Cost

The total cost of the project is estimated at US$108.1 million equivalent, including a foreign exchange component of US$28.7 million and a local cost component of US$66.2 million equivalent. The cost estimates include interest and other charges during construction of US$13.2 million equivalent and contingencies of US$12.3 million. The Government of Indonesia will provide US$44.3 million and the Bank will provide a US$63.8 milion loan for the project.

Loan Amount and Terms

The US$63.8 million loan will come from the Bank's ordinary capital resources and have a maturity of 25 years, including a grace period of 7 years, at an interest rate determined in accordance with the Bank's pool-based variable lending rate system for US dollar loans, and a commitment fee of 0.75 percent per annum.

Period of Utilization

Until 30 September 2004

Implementation Arrangements

As Project Executing Agency, AARD will have overall responsibility for coordination and implementation of the project. The Center for Agricultural Research Programming (CARP) under AARD through a Project Management Unit will be responsible for the day-to-day implementation of the Project. The Center for Agro Socio-Economic Research (CASER) will coordinate the technical backstopping and the regional activities implemented by the Assessment Institute for Agricultural Technology (AIAT). CASER will be supported by an in-house, multi-disciplinary research and development specialist team composed of senior AARD research staff. National Research Institutes (NRIs) will be responsible for the implementation of strategic research activities and backstopping the AIATs in generating appropriate technology components. Project Implementation Units will be established in each project province to assist the Director of the AIAT in the implementation of project activities at the provincial level. Through collaborative programs with AIATs and a research and development grant facility, provincial universities, local nongovernment organizations, farmer organizations, and private sector and other local agencies will be involved in the implementation of project activities. Provincial extension services will be used for on-farm research and technology transfer collaborative activities. Two advisory bodies will provide policy guidance during project implementation: (i) a National Advisory Committee will advise AARD on overall matters related to regional research; and (ii) a Regional Advisory Committee, backstopped by a regional Technical Working Group, will advise the AIAT Director in each province. An in-house AARD steering committee will ensure coordination between the Project and the complementary World Bank Second Agricultural Research Management Project.

Executing Agency

Agency for Agricultural Research and Development

Procurement

Civil works contracts will be awarded on the basis of local competitive bidding (LCB) by prequalified contractors in accordance with Government procedures. Vehicles, spare parts and other equipment for AIATs, NRIs, and other AARD units will be procured on the basis of international shopping. Office furniture and equipment will be procured on the basis of LCB procedures acceptable to the Bank. Off-the-shelf items costing less than US$50,000 may be procured by direct purchase procedures.

Consultant Services

The Project will require about 437 person-months of consulting services, including about 169 person-months of international consultants and 268 person-months of local consultants in the specializations of research management, management development, research and development training and communication, horticulture, fisheries, and agribusiness research and development. Consultants will be selected and engaged in accordance with the Bank's Guidelines on the Use of Consultants, and other arrangements satisfactory to the Bank for the selection of local consultants.

Estimated Date of Completion

31 March 2004

Project Benefits and Beneficiaries

The main quantifiable benefits of the project will derive from the adoption of improved agricultural technologies. This will result in increased farmer income through higher farm productivity, reduced costs and/or improved economic returns from farm diversification, and better market-oriented production. The economic contribution of agricultural research has been widely recognized with postanalyses showing returns to investments for various commodities and countries in Asia - including Indonesia - in excess of 25 percent. The project will provide benefits that are widespread throughout the agriculture sector, as reflected in more effective and efficient management and use of research and development resources, especially at the regional and provincial levels.